"Oil Producers’ Ugly Duckling Refineries Just Turned Into Swans"

"Oil companies’ least-loved business over the past five years is proving to be their lifeline.

Margins from refineries in northwest Europe rose fivefold last quarter to the highest since at least 2003, data from Total SA show. In the preceding quarter, the share of profit from processing crude and chemicals at Royal Dutch Shell Plc and BP Plc was four times higher than the same period a year earlier.

The turnaround follows last year’s end to an oil boom that tripled the cost of crude for processing since 2009 and spurred a focus on drilling instead of refining. A decade-long doubling of refining capacity in China also swamped European efforts to rein in supply. Crude’s slump in the past year has reversed the dynamic, curbing refining costs and raising demand for fuels."

Rakteem Katakey reports for Bloomberg July 23, 2015.